cheryl: you had a dow that jump higher. it was on news that the president would be coming out to speak. if washington get together, it will be nice to see. shibani and ashley, this is the most unproductive congress sent 1947. ashley: that is not easy to do. shibani: there is a lot going on this year. i am shibani joshi.

ashley: and i and ashley webster. fiscal cliff talks are stalling. tax hikes and spending cuts. president obama said to speak in about 30 minutes from now. shibani: stocks are holding their ground. waiting for some sort of news out of washington. the dow sitting at session highs. at least we are closing. ashley: it changes with every headline. the world ringing in the new year. new zealand, australia, japan, china, we will get a sneak preview of celebrations being planned as times square gets prepared for 1 million visitors. it is a complete nightmare. [ laughter ]

ashley: time now for stocks now as we do every 15 minutes. we are up 51 points. not too bad on this last trading day of the year. >> that is right. the dow has been pretty flat. going back and forth between the red and green. the nasdaq is up 30. same goes for the s&p stock of about nine points. we are also watching a settlement between u.s. regulators and about a dozen banks. sources tell the "new york times" that 14 banks include tank of america, wells fargo and jpmorgan chase. we are taking a look at those stocks. back to you. ashley: diane, thank you very much. well, the question is, is the

unthinkable about to become reality for back now, it is up to this man. on the right. vice president joe biden called in to help with the debt negotiations that we think are going nowhere. there are always rumors and whispers in the hallway. let's go to rich for the very latest on the progress. rich: there is progress, ashley. they are working on a tentative agreement right now. they can always get choked up on the finer points. this is what they are working with right now. it basically extends all tax cuts for people under $400,000 a year. it permanently patches -- it make sure doctors treating

medicare patients do not get a pay cut. a one-year extension of unemployment benefits. on top of all of this, there are some discussions on how to deal with the sequester. they amount to about $8 trillion over the next decade. $94 billion total in 2013. the u.s. and congress and the white house, according to our source, is weighing a 60-90 day delay in those automatic spending cuts. that is how they would deal with that. one omission in all of this, and this is very important, they are not discussing an extension of the debt ceiling. they want to have that yet ceiling fight. it is definitely a no go in the

house for republicans. this is what is going on right now. back to you. shibani: at least that is the plan for the time being. thank you a lot, rich. right now we will go to peter barnes who is standing at the white house. we know the president will be speaking in about a half an hour peter: it sound like he may be announcing the deal because of some of the stagecraft around this. the white house says they will be making an announcement with middle-class families. he will be announcing some kind of tentative deal, tentative framework in his statement here at the old executive office building in just about 30 minutes from now. no comment from the white house.

we want to remind everyone that it was just yesterday that the head of the republicans and senate, mitch mcconnell, said that he was frustrated with the negotiations with the democrats majority leader harry reid unless he was going to make a call to his longtime friend joe biden to see if they could get the talks moving forward. he said he was looking for a willing dance partner. it appears he may have found one here. the vice president, as you know, has come in at the last minute on numerous deals in the past. the most recently on the big debt ceiling fight back in 2011. shibani: they have 25 minutes to work it all out. ashley: peter barnes, thank you very much. we will be taking the presidents live in about 24 minutes. there is no deal yet. what will be that immediate impacts if they cannot come

together. $536 billion in tax increases, payments to medicare providers will drop by 27%, extended unemployment benefits will expire 42 million individuals. we should have listened to our next guest. he called it. if he hopeful we will get a last minute deal? stephen moore. look, you are here earlier this month and said we will be back here talking with you. >> here we are. ashley: we are getting inklings of some sort of deal being put together. >> i heard for the first time what you just heard. the framework of that deal -- i think that was something that probably could make it through the senate and the house.

nancy pelosi will have to deliver anywhere from 50-100 votes from her democratic office. but, of course, let's not forget that gets us around the immediate problem of what they are calling the fiscal cliff. this is just act one. then we deal with the dead ceiling. this was just the idea of an opening bid, if you will. i think it will be good news for the market if a deal like this were enacted. shibani: you are talking about the markets. i want to ask you about their role in getting to this point. we have seen steep declines. multi- hundred point the kleins in some instances, we have not been met in this case. is this part of the reason we are in this position?

>> well, you know, the last two weeks have been pretty brutal for the markets. i think that has been kind of the lead up for this current situation we are in. who knows where the market is going. i do think there will be a big sigh of relief if we get a deal today or tomorrow. i think the markets will celebrate, later this week. there is about 15 or 20 movable pieces in this puzzle. what are we going to do about that empty void that what are we going to do about medicare? there are so many pieces we do not know what the final deal will look like.

i think john boehner, there was a lot of scuttle about three or four days ago, but i think he actually, i heard that he got a little standing ovation from his caucus earlier yesterday. i think he comes out of this. i think he will be as strong as ever. this is just the opening round of negotiations. this will go on for six months or a year. we still have to pass a budget and a debt ceiling. ashley: that is right. steve moore, senior economics writer with the "wall street journal." steve, thank you very much. shibani: so far the markets are having a tough time deciding what will happen over the next few hours. ashley: traders worried? we will ask a chief market strategist. we will have his opinion coming

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shibani: breaking news, live pictures from the white house as we wait for president obama to speak in about 15 minutes from now as lawmakers struggle to

hammer out a deal on the fiscal cliff. peter barnes believes the president will announce a deal. we will bring you his comments live. it is an early close on the trading day. sandra smith is in the pits where traders are watching every development in washington. she joins us now with today's trade and how commodities are faring. sandra: we just had financial commodities close for the day. the treasury pits just closed minutes ago. it was an interesting close to watch. as you put up the board, treasuries saw their first loss in four trading days. another sign that these markets are predicting some sort of deal to get down by the end of the day. we are not seeing investors slinging. the yield on the ten year was the lowest close on record. certainly a big sign coming from

those markets. they closed at the top of the hour. the dow, s&p and nasdaq futures closing here in chicago. just moments away from that. the electronic trading of all of these products will continue and have their mourner hundred normal trading hours of the day. we are watching gold prices. they are gaining in today's session. silver also. gold on it way to its 12th annual game. oil prices, those are climbing, as well. oil, right now, it is at about $95.05. we are watching everything right now. back to you. shibani: thank you.

we will check in with you later. ashley: let's check on the markets on the floor of the stock exchange. we are up 64 points. the president going to be speaking now in about a quarter of an hour. we could go off to the races if we get a deal. >> the dow up and the s&p and nasdaq are all in the green. the fda today approved a stroke fighting drug from both companies. looking at bristol-myers today, it is up about 1.5. year to date, we have bristol down. they are hoping this deal will bring in a happy 2013. back to you. shibani: we are watching the markets take up higher and higher. jumping about 30 points in the last few minutes as we are getting more indication that a deal will be worked out in

washington. the markets having a tough time deciding. remaining, surprisingly, optimistic for now. david joy, chief strategist, i want to kind of fast forward past the fiscal cliff. we know in some way shape or form that this will happen, but also guaranteed to happen is a lower growth and environment. >> maybe a little lower growth environment. that will be a result of the federal government beginning a deleveraging process. something that is been well underway in the private sector for a long time. i think the result will be very good. i just think we need to get beyond all of this uncertainty with washington and in the private sector can go above doing its business. i think that outlook is good.

shibani: i think a lot of us are looking forward to this uncertainty. we have debt ceilings. we also have a budget to get through. how do you position yourself? what sectors or stocks do think we'll be able to hold out anymore stable fashion? >> first of all, i think the second half will be a stronger one. in the short run, while that is going on, i think somebody's defensive sectors may still provide a good place to be. they will continue to be attractive. if you look at the market today, it is telling you how things are likely to perform in the second half. you see, for example, materials, technology, industrials doing very well. i think those will be the real eaters in the second half of the year. shibani: it will not happen as

robustly here in the united states. >> first of all, the u.s. could surprise a little bit. maybe deliver a little bit better than the consensus. you see housing doing better. you see manufacturing, certainly, doing better. the shanghai composite is up 15% in just the last 30 days. you are starting to see better manufacturing data. better exporting data. also, the nations in the pacific rim, as well as, latin america. shibani: before i want to ask you -- >> i am a little concerned if we trigger the fiscal cliff, you may see a rotation away from lower quality debt. if we avoid that, then, i think, though bonds will be an

attractive asset class this year and maybe more so than investment grade. certainly, both are more attractive than treasuries. shibani: david joy, thank you for being on with us today. a very happy new year to you, as well. >> thank you. same to you. ashley: the fiscal cliff is the big story. that is not the only thing that could mean major changes for you and your wallet next year. changes for healthcare. that is coming up next. shibani: we are also waiting for the president's remarks live from the white house. we will bring them to you live. ♪ droid dna augmentation initiated.

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the 952013 kicks off, affordable care act will be front and center.

we know there will be an eventful year. what are some of the biggest things we need to keep an eye on >> the biggest thing is the affordable care act. the obama administration sees this as the key here for getting it implemented. there is a problem with that, though. most of the governors do not want to participate. ashley: if they do not participate, does that mean the federal government comes in and takes over? >> that is exactly what it means. the federal government comes in and does it for you. if you do it yourself, though, in your state, you really do not have that much discretion. a lot of governors are saying, why should i participate, let's let the federal government comment and we will let them take the blame if it does not work. ashley: yes, if you did it

yourself, you would have to live by these tough timelines, but i find it interesting that states do not at least want to have control over their own destiny when it comes to these exchanges. >> i would rather try to do it myself and have the federal government do it for me. however, the other governors have looked and said they do not want to participate. it is not you get to make the exchanges the weight you want to do it like the utah governor is trying to do it. ashley: let's also talk about the expansion of medicaid. >> they are adding 16 million people to medicaid over the next few years. the budgets are already quite strange. it is the largest single

spending item on all state budgets. state governors are looking at medicaid and they are think the federal government promises to pay more of the expansion in the first couple years, but they do not say what is going to happen in the subsequent years. ashley: what about doctors facing substantial cuts in their medicare reimbursement? >> the fiscal cliff feel that they are talking about, president obama will be on in a few minutes, apparently they are talking about the doctor fix. it will increase the size of the deficit. if you are looking for ways to fix the problem, we have the biggest place to go in terms of cuts. ashley: thank you so much.

thank you for joining us. shibani: the city of chicago is number one and parking costs. giving chicago the most expensive parking meters in the country. downtown residents can look forward, starting tomorrow, to paying $6.50 for parking in 2013. up from the current rate of $5.75. back in 2008, former mayor richard daley agreed to release the parking meters to a private company. the city in turn received a billion dollars as part of the agreement. current mayor is investigating the deal, but, in the meantime, all meters will be set to the new rate to the end of february. get your quarters out.

bring your dollar bills, i guess. ashley: take the bus. shibani: the midnight deadline is fast approaching. will there be a framework to avoid the fiscal cliff? ashley: up to the minute coverage from washington. guess what, republicans should just walk away now. oh, boy. ♪ [ indistinct shouting ]

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ashley: breaking news. there is the podium. no one in front of it. live pictures from the white house. president obama set to speak shortly from this location as lawmakers definitely try to hammer out a deal on the fiscal cliff. of course we'll bring you his comments live which are stated -- slated to begin anytime. it could be a little tenuous when he actually speaks. we'll keep an eye on it. as soon as he does we'll bring it to you live of course. stocks hanging in there up 53 points. let's go to our own diane macedo on the floor of the nyse. >> ashley, stocks are looking better than they started. dow futures up a little more than 50 points. nasdaq is up 34 and the s&p is up 10. again this is on hope that lawmakers will announce a fiscal cliff deal before the end of the day. we're keeping an eye on a group of pe firms agreed to

by duf and phelps, financial advisory and investment banking firm for $665 million. 19.2% premium from the friday closing. it is up 8% year-to-date, ashley. ashley: diane, thank you very much. shibani: senate majority leader harry reid saying democrats and republicans still remain very much apart but we do believe they are hammering out a framework for a fiscal cliff negotiation. we're getting some sense of a skeleton or a framework. ashley: something. shibani: we have rich edson, i believe standing by with us to give us details what is emerging. also peter barnes. rich, what looks like will come and be brought to the president in a few moments time we hope? >> well the p.m. is the spending cuts and automatic spending cuts known as the sequester. we'll get to that in one second. here is the current framework lawmakers are working with, top republican and democrat negotiators t would exempt income of 400,000 for individuals.

$450,000 for families from tax increase amounts go to clinton era rates, top rate there, 39.6%. permanently patches all the tern any of minimum tax to assure unless of americans avoid paying amt. estate tax goes to 40%. all amounts exempt up to $5 million. one year extension of unemployment benefits. delay in the ski questionster, that is what they're talking about now. where do you get the other spending cuts to replace the automatic spending cuts of $94 billion next year? there is something to increase spending part of this as well. this is something congress usually does every year. this is the doc fix, to insure medicare doctors don't get a massive cut. this is part the framework. this costs money. republicans and conservatives say we need to get spending under control here, perhaps letting sequester hit automatic cuts would be good at least they get their spending cuts.

one item not in here very good for chances of passage in the house, debt ceiling is not incree. republicans say they can use that to extract more spending cuts as the new congress takes over later this week. back to you. shibani: perhaps a little ambitious to tackle that. rich, i want to ask you very quickly. we don't have any indication i didn't hear you say anything about the farm bill. effect in milk would affect everyone, eight dollar a gallon. anything on that, or emergency dollars for sandy victims as well? >> there is still discussion on the house side of dealing with the sandy bill. there was negotiations in meetings last night with the members of the new york and new jersey delegation specifically related to sandy and number of difficult farm committees and farm state representatives have been discussing with republican leadership how they get that done as well. all the parts are moving here on capitol hill. when it comes to the fiscal cliff negotiations everything is extremely fluid. the deal is a tentative

frame work. they're still working out details. shibani: got it. still very much anything can happen. thanks a lot. >> all right. ashley: rich, thank you. a framework perhaps. let's go to peter barnes at the white house. peter, what are you hearing? >> i can confirm what rich is reporting much the president will come out here any minute but he is not expected to announce a final deal. he is going to say that the congressional negotiators and the white house are close to a deal here but that the clock is still sticking to try to get something done. some of the political optics he is going to be appearing in on a auditorium according to the white house with workings chrag americans. so the -- work class americans. the president is here to make remarks. this will not be a press conference to push some kind of a final framework across the finish line in these negotiations. shibani and ashley. ashley: peter barnes, thank you very much. shibani: that is good way of putting it. ashley: yes, very much. as we tick closer to 2013

and the threat of falling off the fiscal cliff, john tamney, forbes opinion editor says the republicans should walk away and not give in. by all accounts from what we're hearing about this framework, john, it appears that the republicans are caving on these tax hikes. but walking away, isn't that a risky thing to do? >> yeah, it is apparent they're not taking my advice. ashley: yeah. >> i don't think they're going in the right direction here. let's be fair here. this is a very large tax increase they're voting for. as we all know the top earners pay the vast majority of federal revenues. so to the republicans really want to be on record having voted for a tax increase in concert with spending cuts we know will not occur? i think it is a really bad deal for the party. better to wait until 2013. ashley: we've done this before, haven't we? tax now and we'll get to spending cuts later. it didn't work out that way, did it? >> absolutely. it will not work this time.

no future congress will be constrained by any future ones. you will never get any spending cuts. the republican party is built on the against tax increases on the idea we have basically a spending problem, no at revenue problem will be on record having voted for tax increases in return for nothing. it is really a bad deal. ashley: what we're hearing on the framework, the limits on the tax rate increases for 400,000 for an individual. 450,000 for a couple. if that's the case what kind of impact will it have on the economy, do you think? >> it's, you know, it is going to have a fairly substantial one. what we have to remember, we are relying in this economy on the vital few, the jeff bezoses, steve jobs, fred smiths of fedex. those are top earners people willing to take a risk on a new idea and on a new company that improves our lives and employs this. why would republicans vote for something that takes aim

at the most productive? it would not be good for the economy. again it would be a very large tags increase precisely because the top earners pay vast majority of federal revenues. ashley: talking about the voters, people of this country, there is some interesting messages. we have president obama reelected. but then republicans hang onto the house. what kind of message does that send to the law makers? >> i think that sends a very clear message that the voters basically said we want divided government. we'll let president obama have a second term but we want the republicans who control the house and that's where tax, tax legislation originates, to basically hold the line on taxes. so i feel like the elector rate made it clear that republicans you're job to protect us from economy-strangling tags increases. this is very quick path for the republicans back into the minority in 2014. ashley: is all this a big forerunner to a big debate over the debt ceiling? >> interesting that you bring up the debt ceiling.

i think that's what the republicans can do. if they basically walk away from a bad deal they have a lot more power going into 2013 in that, basically president obama is going to have to deal with them on the debt ceiling. why not negotiate from a position strength in 2013? any tax increases now are retroactive, rather than give in and basically do great harm to your brand in the near term in return for nothing? ashley: basically what lesson do we learn, john, if we indeed take your advice and walk away or republicans walk away and just fall off the cliff? >> well the lesson we learn americans will still get up on january seg and go to work because what is they're going to do. the other lesson we'll learn from this is the politicians, whether republicans or democrat live to spend your money. so anytime they're not passing laws in haste, we're much better off. ashley: very good. leave it at that. john tamney, forbes opinion editor.

joining us from the place with folks under the might be scope, d.c. john, thank you very much. >> thank you very much. ashley: markets holding their ground up about 57 points. even as time slips away from washington. shibani: traders and really the markets, everyone standing by waiting for the president to learn more details on this fiscal cliff framework that we believe has been worked out. household incomes over 4 -- 450,000 would see their taxes increase. but the sequester, those automatic spending cuts remain the sticking point. we'll give you his remarks when they come out live.

>> i'm adam shapiro with your fox business brief. secretary of state hillary clinton remains in new york presbyterian hospital. she is being treated for a blood clot from the concussion she sustained earlier this month and is expected to stay at the hospital for two more days while being treated with blood thinner. a bad year for orange juice. the freshly-squeezed juice is on track to be the second worst commodities performer of 2012 as fear remains over the impact of greening disease on crops in florida. new york orange juice futures dropped more than 6% today, hitting six week lows. tribune company announced it emerged from bankruptcy. the multimedia company spent four years in a complex chapter 11 bankruptcy case. tribune founded back in 1847. that's the latest from the fox business network, giving you the power to prosper.

ashley: breaking news. live pictures from the white house. president obama set to speak in just under a minute's time now. obviously we'll bring those comments to you live. what you're seeing here, the white house says that the president will be surrounded by middle class americans. and there's a picture of the president returning from the executive office building, the eisenhower executive office building, going back to the white house earlier today. obviously getting ready to make a statement. speculation, shibani, a deal will be announced but now we think it is a framework. shibani: what rich brought to us, we believe households with incomes over $450,000, that was the sticking point what number would it be? 450 appears. ashley: for couples. shibani: for households. permanently patches the amt. other things the president we believe will announce.

capital gains rates up to 20%. nothing in the way of spending cuts. ashley: no. shibani: so-called sequester. we don't believe there has been a agreement. ashley: some sort of a delay. that is big sticking point. 60 to 90 days, some breathing time, how to approach that before they actually kick in. something obviously republicans are not happy with because we're raising revenue but not ultimately offsetting that with spending cuts. the dow, we should mention, up 60 points, has been very resilient. still up on hopes we suggest a deal will get done before we strike midnight tonight. shibani: we'll go straight to the president right now. [applause] >> hello, everybody. [applause] thank you. please, everybody, have a

seat. well, good afternoon, everybody. >> good afternoon!. >> welcome to the white house. >> thank you for having us. [laughter] >> now i realize that the last thing you want to hear on new year's eve is another speech from me. but, but i do need to talk about the progress that is being made in congress today. for the last few days leaders in both parties have been working toward an agreement that will prevent a middle class tax hike from hitting 98% of all americans starting tomorrow. preventing that tax hike has been my top priority because the last thing folks like the folks up here on this stage can afford right now is to pay an extra $2,000 in taxes next year. middle class families can't afford it, businesses can't afford it, our economy can't

afford it. now today it appears that an agreement to prevent this new year's tax hike is within sight. but it's not done. there are sill issues left to resolve but we're hopeful that congress can get it done. but it's not done and so part of the reason i wanted to speak to all of you here today is make sure we emphasize to congress and that, members about of both parties understand that all across america this is a pressing concern on people's minds. now, the potential agreement that's talked about would not only make sure taxes don't go up on middle class families, it also would extend tax credits for families with children. it would extend our tuition tax credit that has helped

millions of families pay for college. it would extend tax credits for clean energy companies that are creating jobs and reducing our dependence on foreign oil. it would extend unemployment insurance to two million americans who are out there still actively looking for a job. i have to say that ever since i took office throughout the campaign, and over the last couple of months my preference would have been to solve all these problems in the context of a larger agreement, a bigger deal, a grand bargain, whatever you want to call it, that solves our deficit problems in a balanced and responsible way, that just doesn't deal with the taxes but deals with the spending in a balanced way so we can put all this behind us and just focusing on growing our economy but with this congress that was obviously a little too much to hope for at this time. [laughter] it may be we can do it in

stages. we're going to solve this problem instead in several steps. last year in 2011 we started reducing the deficit through one trillion dollars in spending cuts. those have already taken place. the agreement being work on right now would further reduce the deficit by asking the wealthiest 2% americans to pay higher taxes for the first time in two decades. so that would additional hundreds of billions of dollars to deficit reduction. so that's progress but we're going to need to do more. you know, keep in mind just last month republicans in congress said they would never agree to raise tax rates on the wealthiest americans. obviously the agreement that is currently being discussed would raise those rates and raise them permanently. now -- [applause] but keep in mind we'll still have more work to do. we still have deficits that have to be dealt with.

we're still going to have to think about how we put our economy on a long term trajectory of growth. how we continue to make investments in things like education, things like infrastructure, that help our economy grow. and keep in mind that the threat of tax hikes going up is only one part of this so-called fiscal cliff that everybody has been talking about. what we also have facing us starting tomorrow are automatic spending cuts that are scheduled to go into effect and keep in mind some of these spending cuts, that congress has said will automatically go into effect have an impact on our defense department but they also have an impact on things like head start. so there are programs that are scheduled to be cut that we're suing -- using an axe instead of a scalpel, may not always be the smart text

cuts. so that is a piece of business that still has to be taken care of. i want to make clear that any agreement we have to deal with these automatic spending cuts being threatened for next month those also have to be balanced because my principle has always been let's do things in a balanced, responsible way. that means revenues have to be part of the equation in turning off the sequester in eliminating automatic spending cuts as well as spending cuts. the same is true for any future deficit agreement. obviously we'll have to do more to reduce our debt and deficit. i'm willing to do more but it will have to be balanced. we'll have to do it in a balanced, responsible way. for example, i'm willing to reduce our government's medicare bills by finding new ways to reduce the cost of health care in this country. that is something that we all should agree on. we want to make sure that medicare is there for future generations but the current trajectory of health care

costs is going up so high we've got to find ways to make sure that it's sustainable. but, that kind of reform has to go hand in hand with doing some more work to reform our tax code so that wealthy individuals, the biggest corporations, can't take advantage of loopholes and deductions that aren't available to most of the folks standing up here. that aren't available to most americans. so there's still more work to be done in the tax code to make it fairer even as we're also looking at how we can strengthen something like medicare. now, if republicans think that i will finish the job of deficit reduction through spending cuts alone, and you hear that sometimes coming from them, that sort of after today we're just going to try to shove only spending cuts down, you know, well, shove spending --, shove spending cuts at us,

that will hurt seniors, or hurt students, or hurt middle class families, without asking also vif lent sacrifice from millionaires or companies with a lot of lobbyists, et cetera, if they think that's going to be the formula how we solve this thing, then they have got another thing coming. that is not how it's going to work. we have to do this in a balanced and responsible way. if we're going to be serious about deficit reduution and debt reduction then it's going to have to be a matter of shared sacrifice. at least as long as i'm president. and i'm going to be president for the next four years i hope. [cheers and applause] so, anyway, for now, for now our most immediate priority is to stop taxes going up for middle class families,

starting tomorrow. i think that is a modest goal that we can accomplish. democrats and republicans in congress have to get this done but they're not there yet. they are close but they're not there yet. and one thing we can count on with respect to this congress is that if there's even one second left before you have to do what you're supposed to do they will use that last second. [laughter] so, so, as of this point it looks like i'm going to be spending new year's here in d.c. y'all, will be hanging out in d.c. too. i can come to your house, is that what you're saying? [laughter] i don't want to spoil the party. but the, the people who are with me here today, the people who are watching at home, they need our leaders in congress to succeed.

they need us to, they need us to all stay focused on them, not on politics, not on special interests. they need to be focused on families, students, grandmas, you know, folks who are out there working really, really hard and are just looking for a fair shot, and some reward for that hard work. they expect our leaders to succeed on their behalf. so do i, and keep the pressure on over the next 12 hours or so. let's see if we can get this thing done. i thank you all. if i don't see you, if i don't show up at your house, i want to wish everybody a happy new year. thank you very much. [applause] ashley: president obama concluding his comments. he says, it appears he said when he first began speaking an agreement is in sight but it is not done but we are hopeful.

he is also saying he will be spending looks like new year's eve at the white house. shibani: yeah. taking a look at the markets, we did jump up when he took the podium. the minute he said a grand bargain is too much to hope for. ashley: we saw a drop. shibani: tackle it in steps. the market jumped up over 80 points at one point. backing off. still up above 31 points. looking how commodities are faring. basically everything sitting in positive territory. getting a little bit more hopeful as he took the stage and pulling back. interesting, peter barnes thought at one point he would announce a deal. that did not happen, but the stage was set, right, ashley? ashley: the stage was set. shibani: middle class americans were there standing behind him. everybody excited for a deal to get ounce nowed but we're awaiting. ashley: still waiting. but as the president says we are hopeful. we'll take a break. we'll be right back with so much more on the fiscal cliff. may be getting a deal.

we're close, says the president. we'll be right back.

shibani: good afternoon. 2:00 on the east coast. i'm lori rothman. we heard from president obama. did he mock congress? ashley: a little bit. this is busy day on new year's eve. not a done deal. we're making progress on an agreement. there is more work to do. the hour is. lori: fiscal cliff taking away from what has been a solid year for stocks. s&p 500 up 11 1/2%. nasdaq up 14%. accordingly we're looking for answers.

ashley: apple shares clawing back from the three-month slide. baron's jack hough says the stock has more upside ahead and he will explain why. lori: as we do every 15 minutes, let's head down to the floor. diane macedo covering all the action. diane, stocks climbing ever so slightly higher. all eyes must be on washington. are investors more encouraged we will get some kind of a deal, however you want to characterize it by midnight tonight? >> hi, lori, hi, ashley. doesn't seem like it if you look at market numbers. they're hiring when we started this morning but they're actually lower before the president started speaking today. the dow is up 45 points. nasdaq is up about 32, and s&p is up about nine. not a huge amount of optimism. still across the board green. we're keeping an eye on duff and phelps. this is a private equity firm, struck a deal to buy that company for $365

million that is 19% premium from the closing price on friday. duff is up almost 20% on the day. year-to-date up 8%. not a bad way to close out the year for duff and fellsps. back to you. lori: thank you. there is little optimism. the fact we heard from the president who seemed to helicopter in as liz macdonald was suggesting to me in the greenroom here and that we are seeing some numbers. looks like the tax cut threshold, 400 for individual. ashley: 450 for the family. lori: for the family. extending unemployment benefits, the doc fix. ashley: i'm surprised they will delay the automatic spending cuts and getting into what is the spending cut side of this? we know about the revenue side. lori: that is where the negotiation is really zeroed in on. seems to me that the whole spending cuts was pushed off the table which is incredibly frustrating. ashley: yeah, it is. lori: but toe get spending cuts back on the discussion with the sequestration if that is ultimately what

happens. >> we shall see. the latest on the fiscal cliff president obama says no deal yet but the discussions have reached a framework of a potential deal. senior correspondent peter barnes at white house with the latest. peter, what do you think?. >> ashley, the president called it a potential agreement. he said it is within sight. close but not there yet. he was in this event with middle class americans, working class americans and he said to keep, asked them to keep you the pressure, keep the pressure on. capitol hill. republicans on the hill, to finish a deal here. let's go over major terms you were just talking about. according to sources, taxes, the 39.6% tax rate from the clinton administration would be imposed for families making more than $450,000 a year and individuals 400,000 a year. this is a significant concession from the president who campaigned on making the threshold 200 and 250.

we also want to let you know that we learned dividends and capital gains rates would rise to 20% from, at those new thresholds, 450 and 400. people making less than that would still get to pay at the 15% rate. there would also be a permanent fix on the alternative minimum tax that affects about 30 million americans this year. they do it every year. they're looking for a permanent fix there. estates under 5 million would be exempt from federal estate taxes. anything over that would be taxed at 40%. there would be as you mentioned a, one-year extension of unemployment benefits. the president saying though that on the sequester, the automatic spending cuts, about $100 billion, half of that for the defense department would kick in on wednesday, they have not finished the details on that. he said, quote, that still needs to be taken care of. so the message from the president in this appearance, two voters out there, keep the pressure up to get a final deal, to get this across the finish line.

ashley and lori, peter, that delay of the automatic spending cuts, 60, 90 days, whatever they work out, there are house republicans who must be very upset at the fact that we're raising taxes but not doing right now about spending cuts. this happened before and the taxes went up but we never imposed the spending cuts. >> yeah. we're getting some feedback from house republicans on the hill through our producers up there. and they're saying that this is, that they don't like this. this is going to be a hard sell and, what this means is, is that, if in fact this gets over to the house floor, nancy pelosi, democratic leader, and the president, looks like they will have to provide a lot of democratic votes for this to get it through and with maybe a handful of republicans. so. the initial feedback from house republicans is, the lack of spending cuts is not acceptable to them. ashley: yeah, not

acceptable. peter barnes, thank you so much with the latest from the white house. >> you bet. lori: let's continue our discussion what is ahead for the country as of tomorrow with regard to the cliff. congressman scott rigel, welcome and aei economist, fill clip swaying he will about. you're in favor of raising taxes, you signed grover norquist's pledge to not raise taxes. you're now rebuking. 450 for joint filers being the cuttoff. which classification of earnings you ultimately will see their taxes increase? >> well, lori, it is very difficult to understand where we go from here because i haven't seen the agreement and, when i look at what ply colleagues really objected to and what was referred to as plan. about, it is difficult to understand why this plan is anything other than a worse plan. there aren't any real spending cuts as i see. so i'm going to have to

difficult time with it myself but i will wait to make a final decision until i see it. lori: i'm sure. phil swaying he will about, to you now. let's talk about the issue of spending cuts. you raise a wonderful point. there are expenditures exempt from budget cuts. entitlements. interest payments on the national debt. that said we need bigger entitlement reform. this is a big pick you are issue here, any cuts they're negotiating to avoid the cliff they're not meaningful. are you at all optimistic we can get to a discussion on meaningful entitlement reform? >> i'm optimistic we avoided the worst part of the cliff but i think we've seen the red line for the president. he really can't talk about entitlement reform. his party is pretty locked in against it. we've seen that with the change in the cpi, for example. so that i think that is going to be difficulty. allowing the president to have his moment today and move on to talk about the real fiscal danger of out of control spending. lori: congressman, what do you think the best-case scenario from where we stand today. how will we wake up?

what will we see tomorrow morning on the new year in terms of taxes? >> i wish i could tell you exactly but i think there is just a 50-50 chance anything will pass before midnight tonight. to be able to process the, to review this bill in such a short amount of time, it is really not fair to legislators i don't think in that sense, the rank-and-file, those of us not privy to the first line discussions. lori: let me stop you right there. there is lot of breaking news right now. we're finally getting numbers with this threshold on the wage earners, some of the other issues, unemployment extension. the doc fix, the amt patch, all of these things. what are you willing to sign before the new year is up? >> what i'm looking for is a comprehensive agreement that actually, and i've been calling for this all year, that reduces spending which is the principle threat to our country. but i am a republican who made the empirical case the revenues have to rise through tax reform and growth. i haven't seen that leadership from the president. that is not a partisan

statement. it is just the best assessment of facts asee it. he is not leading. >> got to be realistic here though. the spending cuts that need to happen to make a difference, they're not going to happen today. >> well, no, and if you look at his statement about the debt limit, some of my colleagues are saying, let's use the debt limit as the real lever. the president already made clear he will not negotiate around the debt limit. so me the time is right now with respect to these cuts and rates that where we have, what little leverage we have is right now. lori: phillip swagel, let me let you weigh in on all of this. people have said that economists said concern about the fiscal cliff has already done damage. the economy, according to the cob is certain to fall back into recession and negative growth in the new year. is that higher taxes in a way a death knell for the economy or whole picture, of increased taxes and increased spending and no

meaningful deficit reduction? >> we're seeing some effect already. you're seeing that in numbers on consumer confidence, on christmas season spending and business investment in hiring. the higher tacks is not the end of the republic. it is bad for growth. but we can still have a strong economy. but i do think we need to deal with uncertainty of what are taxes going forward. this cliff deal is short-term deal. we need leadership congressman was talking about. i wish it was there i agree with him what we really need going forward. lori: congressman rigell, one last comment from you with regards to confidence in washington of the americans are fed up with the wheeling and dealing in washington and no compromise. is there anything you can say to reinforce our confidence in you? >> in institution itself this place is filled with members of congress with gerry manned erred districts, democrats and republicans. no surprise where we are. in long term we have to address gerrymandered

district. if someone comes from r-20 or d-20 district, not only are they not rewarded for common ground they're punished for it. that is evidence why we're at this cliff here in a tough spot. lori: congressman requiring gel and phillip swagel from the aei, thanks to you both and happy new year. ashley: we certainly hope it will be. so much more ahead as we count down to the fiscal cliff. up next how middle class tax bills could get hit by the amt. liz macdonald is crunching the numbers. lori: first as we do every time, every day at this time, rather, let's check the oils market. 73 cents. back after this. it's the little things in life that make me smile.

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lori: washington is hard at work at this hour. we're getting dribs and drabs of information. you can call it just that. in eye event if a deal is not reached in time it can be hundreds of headaches for middle class americans when it comes to paying taxes including paying uncle sam with more money. liz mcdonald is here with emac's bottom line. this is included amt patch extended indefinitely.

>> this was a tax enacted in 1969 to make sure the rich pay some kind of a tax. because it is not indexed to inflation it catches more middle class americans. so the fiscal cliff fallout to hit the middle class hard if congress doesn't act to fix the cliff now. economy is fausting huge risks from self-inflicted wounds. this is from the tax policy center, the codirector there. this is on top of the rate increases it is an $86 billion extra tax hitting squarely in the middle class. and we're hearing from h&r block. h&r block is saying your $1100 refund if you're a family makes 85,000 with two kids could turn into $1400 tax bill. that is warning already. whether or not they fix it. i heard mid-morning, this is the deal. they would permanently fix it. does that mean permanently index it to inflation? that is what we are looking for right now and what is happening.

but separate from all that, we know obamacare taxes are also hitting january 1. ashley: yeah. >> we also have separate from that, 70 tax breaks expiring. things like sales tax deductions in certain states or tuition and fees for certain students. ashley: yeah. >> that is another thing they will have to deal with. states we have to watch out for what we're talking about the amt, california, new york, new jersey those taxpayers could be socked pretty hard if it is not fix. ashley: we're talking about millions of people could be impacted. >> 28 million. usually only 4 million americans in upper class brackets. but now 28 million. seven times. that is scarely middle class. 65 to 85,000 incomes we're talking about according to irs. lori: by end of the day we'll have update for you what to make of all this in terms of your exemptions. is that being overly ambitious by the irs. >> that is a great point. by end of the day it might be. they already warned delays in the tax filing season.

worst-case scenario is after march. other thing we have to watch out for state taxes which are ink hadded tightly to the federal tax system. that creates a cascading effect. ashley: this april 15th deadline, we need it. lori: thank you. >> sure. ashley: thanks very much. as we do, i given you a clue, every 15 minutes. lori: what time could it be? ashley: we do down to the new york stock exchange where our very own diane macedo keeping track of all these stocks. interesting, die nan, when the president started speaking we went down to 15 points on the positive side and come back a little bit. we're hanging in there. >> we were up 50, 60 points on the dow when he started speaking. we're back to. 0 or 50 points. nasdaq is up 33 points. we're keeping an eye on facebook shares today. bmo capital upgraded facebook to outperform. stifel nicolaus also raised the price target.

they're talking about things the company doing better monetizing its product, getting more money from advertising. facebook is up 6.2%. they need the gains. in past six months it has been down 16%. facebook looking for better 2013 than 2012 we think, ashley. ashley: diane, they are. you will be back in 15 minutes. lori: you are good at think, it is in here. lori: a positive year for stocks but with the fiscal cliff hours away how should you protect your money in the new year with a strategist next. ashley: my voice is going. finally i hit puberty. lori: you've been on fox business more than anyone else last two weeks. ashley: here is how the major indices are moving right now. as you can see all up across the board. we lost a little bit of momentum when the president said we don't have a deal yet but optimism reins. green arrows across major industries on this last trading day of 2012. we'll be right back.

lori: all right. both oil and gold in the green as fiscal cliff talks continue. sandra smith is in the pits of the cme where traders are watching every development out of washington with today's trade. what is the general consensus, sandra? >> we're watching the

year-end close on a lot of these pits. this is the euro-dollar options pits, one of the busiest pits on the trading floor, had a early close today. i came over here because i want to show you the 10-year treasury. treasurys in general closing earlier today. as we saw movement into the stock market today amid the optimism over the fiscal cliff stocks we saw a selloff in the bond market. the first one in the last four trading days. still for the year, we saw the yield on the 10-year close at its lowest ever for a year-end close. really significant development there. looking at oil and gas prices, if you pull up a gold chart today, we are seeing somewhat of a significant rally there. we're up about $22 right now ahead of the close and in about 10 minutes. the pit trading session closed. gold futures are up 6% so far this year. underperforming the stock market, but still, guys on pays for its 12th straight annual gain. if you bought into gold at

the beginning of the year you're still making money in the yellow metal. oil prices you ends ined the gain we're seeing there. oil still up more than a buck on the session. still a few minutes to go in the pits trading session there, nearly at $92 a barrel close but still down on the year. oil prices down 8% year-to-date, even though we're still looking at prices going or the year 90 dollars a barrel. i want to point one thing out. when you're looking at the best performing a commodity that trades on the cme, it happens to be lumber. this as we continue to get some positive economic data this year surrounding the home builders and the housing market in general. lumber prices way up there, guys, for 2012, up 52%. next hour, guys, we'll be over in the s&p 500 futures pit. back to you. ashley:. lori: can't hardly wait. ashley: not as sexy as gold but lumber. lori: quick comment on interest rates. no to your point, you were very pointed there is no spending cuts here in this

latest framework out of washington. ashley: nothing. we'll deal with that down the road. lori: deficits, kicking the can, banned phrase in the new year. but no hawkish tone to spending, no surprise, perhaps one of the reason interest rates are popping here. ashley: yeah, may be. lori: on this last day of the year. irs saying it intends issuing guidance at end of the day on appropriate tax withholding for the new year. jeff flock in glean have you, i will now on this angle for us. >> the company is sure payroll. i have rooms of people on the phone, on the computer with small business owners across the america. they service 40,000 small businesses across america. they process their payroll. they do the tax deductions. well, what are the numbers that they're going to use? they don't know at this point. and michael is standing by. you were watching the president. we were watching the president. we're listening. you're listening. at this point you still don't know? >> we still don't know. we're still going by the irs

guidelines which is the payroll tax holiday is every owe. we'll raise that up. >> to be clear on that, that was 6.2%, holiday was down to 4.2%. everybody is going to get an increase in that? >> right. all employees will get the 2% increase. in terms of whether bush tax cuts roll back, we're staying within 2012 withholding guidelines for the irs. >> take me within the room here. these are all service representatives talking to small business across america. a lot of people are not sure whether you will get it right in the first paycheck or not. >> they're seeing their paycheck calculated next year and why are they lower and what is driving that? biggest thing is the payroll tax holiday which is going away, the extra 2% being taken out. >> in fairness, to most people, if the deal is as we think it is, 400,000 or above, most of the employees you process paychecks for doesn't affect, correct. >> correct. and most of the employees in

the country. over 98% of the population. >> if they don't get a deal done, you have to go back and do mass computations. >> we have to do mass come kpu -- computations and change the tables. >> could be a disaster if this doesn't come off but we'll see, lori. sure payroll is the company. lori: jeff flock, thank you, sir. >> thank you. ashley: that uncertainty as we wait to see what they do in d.c.. stocks are rising on the hopes of a fiscal cliff deal and they're headed for solid gains in 2012, actually. we have aaron glick, i can quit portfolio manager for global iq capital markets. aaron, thanks for joining us. it has been a solid year for 2012, but let's push forward now. assuming, this is a big assume, we get some sort of a deal on the fiscal cliff. what are you expecting in 2013. >> you know, right now we're actually pretty positive. we're looking for one,

1 1/2% gdp growth. the numbers that couple in november, a couple of numbers were very positive. we saw existing home sales cross the five million units which is the high since 2009 and we also saw auto sales cross above 15 million which is the highest since 2008. those are the big ticket purchases we've been looking for. since 2007 we've seen consumer spending keep the economy going but we didn't see the big ticket sales come up. and november was the first time we saw that so we're assuming that the fiscal cliff goes through, and i'm sure it will, whether it happens today or two weeks i'm sure it will. we're actually pretty positive. our concern however is earnings. guidance and analyst estimates have been extremely negative. some of the lowest we've seen in recent years. and we see that in valuations. we still see a lot of opportunities in the stock market in this low yield environment. we're still very positive on equities and we still feel

there are a lot of opportunities. ashley: what about opportunities, erin, overseas? you know, the dax, for instance, out of germany, up 30% this year. should we be looking overseas for a good return? >> personally with our investors i actually guide them more towards u.s. stocks. in fact one of the things we look at, are u.s. companies that don't have a lot of european exposure. ashley: yeah. >> certainly northern europe is still doing well but i just find that entire area, it is a little too much risk than what it's worth when you can still invest in the u.s.. ashley: what about china? we're getting some very good manufacturing numbers out today. highest in a year and a half. that sound like a lot of solid growth? >> yes. so china is very stable. still an opportunity we look at. we do invest, in our global portfolios, we definitely have some asian exposure. there was definitely some concern in the fourth quarter. we saw some of the manufacturing and growth rates come down. still an opportunity abounds

out there. ashley: what do you like in particular as far as sectors go or particular stocks looking towards next year? >> absolutely. glad you asked that. so one of the things we look at is, the quality. is a company able to operate and deliver earnings and dividends in a variety of market conditions. ashley: yes. >> and we see that a lot with the consumer, both consumer staples and consumer discretionary. one stock we really like is safeway. now it has been beaten down, i know, but it has, but this is the value. this is where to get in. so that is one of our stocks that we like. another one we also like is staples. not quite as beaten down but done very well in a variety of market conditions. you still need office supplies. no matter what. we're still going to work. also high dividend yielding stocks. even with the tax increases. i know, whatever the compromise is, i'm sure the rates will be higher. but, companies are loathe to

respond to political environment changes. ashley: right. >> just historically they don't tend to change their policies because of taxation differences, partially because not all of your investors are taxable. so we still look for dividend yielding because cash in hand is still a great way to avoid, take off the risk, some of the risk from equities and still have that exposure. ashley: very good tips indeed. erin gibbs, thanks so much for joining us on this new year's and happy new year to you. >> happy new year's, thank you. ashley: all right. coming up, time is running out to stop automatic tax hikes, you know that, and spending cuts, we know they could cripple the economy. there is a framework for a deal but will it get done? lori: we shall see. the clock is ticking. meantime we'll have the very latest where talks stand live from the white house and capitol hill next. our folks are working hard on this new year's eve. first look at some of the day's winners and losers on wall street. by the way, dow back above 13,000. just ticking higher moments ago.

♪ ashley: 30 minutes past the hour. let's get a check on the markets as we do every quarter of the hour. the new york stock exchange. italian. >> hello. so we're taking a look at the markets. green arrows across the board. the dow was back above 13,000, about 76 points, the nasdaq 42. s&p and about 14. session highs for the most part. also taking a look at pfizer and bristol-myers squibb, the fda approving a stroke fighting drug from both of those companies. bristol-myers is currently up a

little more than 1%. pfizer fairly flat year to date still. of more than 15%. bristol down about 8%. hoping this deal will help them boost those profits. ashley: thank you very much. tracy: the clock is ticking down before the country goes into peril, collides, goes tumbling off the fiscal cliff. no collision, unfortunately. that is what they're trying to negotiate in washington. negotiators have reached a framework. that is the latest news. president obama's says it is not a done deal yet. complete coverage with rich edson on capitol hill. peter barnes of the white house. rich chemistry to you. >> reporter: they are close. they do have a framework. the outstanding issue is what to do about all those automatic spending cuts known as the sequester that are supposed to start tomorrow, $94 billion in 2013 alone. take a look at the framework, basically what they have agreed to. the tax portion exams and, 400,000 for individuals, foreign

and $50,000 for families from a tax increase amounts of more than that would go back to the clinton era top rate of 39% also including capitol gains and dividends. they stay where they are for amounts over 40450. they go up to 20%. permanently attaching the alternative minimum tax and sharing million americans avoiding. there is a 1-year extension of long-term and is chief of unemployment insurance benefits. there could be a slight delay in the spending cuts known as a sequester. still working now right now, but this is a letter that senator mitch mcconnell minority leader in initiating this republicans have sent to a fellow republicans in the senate. this is attained by our colleague. the ," is the text pieces complete end and as of last evening at 1:45 a.m. i thought the entire deal was sealed. early this morning the white house call demanding the we also

turn off the sequestered. right now is this debate over what to do about the spending cuts, the automatic spending cuts. republicans say you will get rid of it, have to propose and agree to other spending cuts to replace them. that is the debate now. tracy: taxes and spending is all we have right now. ashley: that's all we have. all right. thank you so much. over to peter barnes at the white house with the latest on this location. >> reporter: as you know, the president held an event just in the last hour here with working-class americans, working-class families to try to put pressure on the negotiators to wrap all this up and to get this deal, this framework across the finish line. the president said that they are close, but not there yet. he urged voters to keep the pressure on their members of congress. take a listen. >> today it appears that an agreement to prevent this new year's tax hike is within sight,

but it is not done. there are still issues left to resolve, but we are hopeful that congress can get it done. it is not done. >> this is not necessarily a comment targeted at republicans on capitol hill. also hearing that there are some democrats who are not entirely happy with this deal either. a group of senate liberals marching into, according to our colleagues upon the hill, marching into harry reid of this when they got wind of this deal with their concerns. so it is not dead yet, but the pressure being kept up to get it done. ashley: and the clock ticks away. thank you. once again, washington, no big surprise, waiting until the last minute to meet the deadline. there is a framework, as we just heard from peter and rich for a deal, but will they get it done

before the clock strikes midnight? a spring in willis. what is your take on what we are? >> i heard this describe time and again, and i cannot imagine how it would get through the house, house republicans are going to support it. it is all spending. it is all raising taxes, raising spending, not even going to use the sequestered as a way to constrain spending. let's take a look if we do go over the cliff, which is entirely possible even though the president had his press conference. that does not mean we have an agreement. the individual average american will face increased taxes a 3500. don't forget, right away you are going to feel this in your payroll tax. the expiration of the two percentage point increase in the payroll tax cut. 115 billion is the amount of money will cost. so think about it. we are not just talking about next year, but the paycheck, the very first paycheck that you get

this year. this is a huge impact for americans. i cannot -- look, it is going to be big, and is not just going to be big for your paycheck, but the economy. some economists today are even saying that this is going to -- some kind of last-minute partial deal. that is still going to hurt the economy. ashley: according to our they have sewn up the tax side of this with the individual. it appears, down at the last second, put in at the very last second. if we do get that kind of deal, i can't see republicans, they have been down this road before were they have agreed to tax hikes. spending cuts to come later, and during the reagan years than ever came.

>> of the democratic dream. the democrats during. maybe we should just go over the cliff and work toward a grand bargain. i never believe that because i knew that the cost would be so big. the grand bargain, the sequestration in particular, you get the spending cuts but you get them in defense and areas that really sock it to you. >> we have to go after entitlements. that is where most of our spending is. it's not going to happen. that's why we need a grand bargain because the move will take into consideration that is spending. that is the killer. >> how this is going to change, the time we get to your show tonight. this could change here four times. ashley: i know. waiting for something to happen.

tracy: i have to throw out there, the market is up 62 points, dow hovering at 13,000. i think it's because the closing bell rings a 4:00. a lot of time between 4:00 and midnight. champagne. unfold. i think we are yet to see the most fireworks, if you will. ashley: when they should -- when they should be an interesting day. ashley: don't miss gerry. tracy: hang around in our p.j.'s and wait. i think wednesday is an update to it wants the markets. ashley: all right. don't mess tonight. you don't have a pair of bloody slippers? >> i'm a girl. ashley: you can wear bunny slippers. tracy: breaking news. oil is closing. hire by dollar and $0.2. 9182. don't throw your hands of the meat. of want to see those. on the year here, the clothes for oil. oil down $7.1.

7 percent. coming up, muni bonds have had a wild ride in 2012. the fiscal nightmare continuing in washington. this asset class stands to lose a lot. we'll have a preview. the head at sharing his outlook next. ashley: first, as we do every day at this time, the ten and 30 year treasurys. the yield on the tenure up four basis points. as with a 30 year, bonds, here we go. we will be right back. ♪ [ male announcer ] this is karen anjeremiah. they don't know it yet, but they' gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other,

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band fear remains over the impact of greening disease. new york orr's use has dropped more than 6 percent today hitting six weeks lows. i get last day for 2012, it announced it is emerging from bankruptcy. the multimedia company spent the last year-and-a-half tangled in a nasty chapter 11 bankruptcy case. in the border directors and new ownership was also announced. dating back all the way to up 1847.

lori: with more, head of

municipal. happy new year. thank you for joining us. >> it certainly is. lori: the first issue of one to talk to you about, working it into this office will cliff crisis. investors know aren't interest is exempt from federal taxes. did this change directly? >> there are two issues that we are concerned about. one is what happens with federal deficit reduction. and as you indicated, more importantly and of more concern is what happens to the tax code. a lot of talk about -- lori: this is the main benefit, federal tax exempt. sorry to interrupt you, but i just want to reiterate that. >> sure. well, the president in his 2013 budget included a provision that

would make munis subject part to this cap that he has articulated that was in the budget, the jobs bill, the administration admission to the suburban committee. that provision has been around for quite awhile. that seems to be the thing that has taken root and has done a lot of publicity. that's what we are most concerned about. lori: listing to developments, it seems like it is much more tax increases and spending increases. to be concerned about budget cuts by way of investing in muni bonds, is it really that big of a concern hearing the rhetoric that's coming out of washington? >> it is a big concern. most states depend on the federal government for about 30 percent of their revenues. to the extent there are these cuts in discretionary programs, as long to come right out of

state governments and local governments. and also just generally speaking of we have significant budget cuts, most economists, ours included consider that to be a precursor to lower gdp growth. we know for a fact that gdp and state revenues are highly correlated. lori: if you want to buy them now, was revised? >> you know, we are fairly priced right now, particularly in the ten year, 101% of treasury. that is a fair price. so our advice is to stay short, do not do what people are tempted to do which is to go along or go down the credit curve. stay short, high-quality. there is too much uncertainty. lori: thank you. that is me. ashley: in a nutshell, yes. lori: totally getting. these bills are falling off.

ashley: a quarter till. time for stocks. lori: 47. ashley: you took a little time. what's going on. >> reporter: we are taking a look at the market. a session highs, seeing the dow up significantly from where it was. eighty-one points, 44 for the nasdaq. hopes for a fiscal cliff deal. standard and poor is lower. based on the announcement that they would use debt to fund its acquisition. the back deal sealed on november november 27 to. $5 billion. year to date numbers of about 10%. hoping it will contribute to these. lori: markets climbing toward session high spirit which fourth quarter stock laggers are set to rebound? editor jack l. is here with some of his picks next.

ashley: live behind the scenes for attackers biggest night of the der -- year. let the ball drop. take a look at some of today's winners.

♪ ashley: breaking news. senate minority leader mitch mcconnell speaking live. the deal is close. let's listen in. >> we must do this. to what my colleagues to know that we will keep everyone updated as we continue to try to wrap this up. i yield the floor. >> senator from tennessee. >> appropriate. ashley: you just heard some a minority leader mitch mcconnell. lori: not happy. ashley: not happy. ashley: i will be looking more grumpy. lori: to say the least. lori: 450 for joint filers. if you are less than that your tax cuts are extended. ashley: these are spending cuts. all right. our next guest says there could be reversed january effect

happening in the markets where investors are dumping winning stocks ahead of likely tax hikes that is the opposite of the usual selling losers in december will the shift to buying and opportunities in the new year. you may have actually coined the reverse the january effect. maybe you should get a patent on matter something. >> an interesting idea. i was looking for a way. looking for a way to put this congressional clown show to work for your portfolio. see if you can at least make a profit. the idea here is that, take a look at apple. some top performers in recent years, but this quarter it has gotten killed, and a lot of people saying, that's tax selling. people are taking a gain on the stock now because they anticipate that the gains rate will go up next year. we don't quite know what will happen, but on that anticipation could that be causing people to sell? may be.

and some may be there is. if that's the case, maybe these will rebound to january when the selling abates. ashley: selling the winners instead of the losers. >> exactly. the reverse of the typical. what other stocks? the cirrus logic which is a key component maker for apple. audio devices. a cheaper stock. six times earnings. the vast majority of its money from one customer. national barco, top supply of drilling equipment. and then there is one of these off-price retailers. you know, they buy merchandise opportunistic week. they up to people who are trading down from department stores looking for a break.

so they have got tremeedous business. it think they can double the size of the store chain. these are good stocks. they have just sold off this quarter. now and just want to point out, this is the stock market hunch. so have to make sure i read about four companies. even if this reversed. you still have a good stock. ashley: you're not looking for beaten up stocks. you have to dig in their life for the fundamentals. >> big winners of the past three years. lost big just this quarter and were otherwise cheap, so you're going to be okay on long-term. financially strong and she companies. the good stocks for you at any time of year, but right now on just a hunch maybe these stocks would be due for a boost in january if they get a lot of selling for tax purposes this december. ashley: just to broaden out, if we do get some sort of cobble together a deal.

>> how long do we have? ashley: nine hours and five minutes. did you see a good year for equities coming up in 2013? >> if we keep it at just good, not even good with a smile, just straight face. i think it will be okay. everywhere, investors, with interest rates this low, bond yields poultry, investors have been on search. basically all parts of the investment markets have been squeezed right now. pretty high on some of them, but i think u.s. stocks are a fair deal right now. okay earnings growth. valuations look okay. companies in the u.s. are financially strong renown. ashley: very good. thank you for being here. a crazy newsday. thank you so much. lori: a quick beat here. want to point out the market is up. we just heard senate minority

leader, the republican portion saying we're very close to a deal. it is painful, but slight progress is being made. ashley: president and ceo. considering a monster rally this year. that fox business exclusive.

♪ liz: close, but no cigar just yet. president obama telling wall street and washington that a deal is within sight, but not done. senator mitch mcconnell saying pretty much the exact same